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Amgen Tops Forecasters on 2nd-Quarter Earnings

Shares of Amgen (NASDAQ:AMGN) moved 1.98% higher to $179.95 in after-hours trading on Tuesday after the U.S.-based international drug producer posted second-quarter results.

Non-GAAP earnings increased 4% year-over-year to $3.97 per share, exceeding estimates by 39 cents.

GAAP earnings rose 3% to $3.57 per share, surpassing estimates by 39 cents.

Revenue of $5.87 billion was 3.1% lower year-over-year. It was, however, $200 million above expectations.

The chart below shows the trend in Amgen's total revenue over the past five quarters:

The chart below shows the trend in Amgen's total revenue over the past five second quarters:

By key product, Amgen reported these changes: Arthritis treatment Enbrel increased 4.7% to $1.363 billion, and osteoporosis treatment for men and women with a high risk of bone fracture Prolia rose 14.4% to $698 million.

Xgeva, a treatment to prevent several skeletal conditions in multiple myeloma patients and others with a disseminated tumour, grew 10.4% to $499 million and Repatha, a treatment of hyperlipidaemia, climbed 2.7% to $152 million.

Migraine treatment Aimovig soared 999% to $83 million and second-line treatment for a specific form of acute lymphoblastic leukemia Blincyto increased 30% to $78 million.

In contrast, preventative neutropenia product Neulasta fell 25.1% to $824 million and anaemia treatment Aranesp declined 7.6% to $436 million.

In the second quarter of 2019, total product sales were 2% lower compared to the second quarter of 2018. The operating cash flow sharply declined 33.3% to $1.4 billion.

Moreover, Amgen used $2.3 billion for the repurchase of 13.1 million common shares in the quarter and allocated $900 million for dividend payments.

For full fiscal 2019, the company forecast revenue between $22.4 billion and $22.9 billion, up 0.9% from the prior range of $22 billion to $22.9 billion and versus expectations of $22.59 billion.

Non-GAAP earnings are expected to be $13.75 to $14.30 per share, up nearly 2% from the previous range of $13.10 to $14.30 and versus estimates of $13.97.

GAAP earnings are anticipated at $12.10 to $12.71 per share, representing a 1.6% increase from the previous range of $11.68 to $12.73.

The company projected to use $700 million as capital expenditures in 2019.

Amgen closed the second quarter with $21.8 billion in cash and short-term securities, a 25.6% drop from the prior-year quarter. The total debt outstanding was 11.2% lower at $30.6 billion. The company lost 4.1% of year-ago shareholders' equity to book $10.8 billion on the balance sheet at June 30.

Amgen stock declined 10% for the past year through July 30 to $176.4 per share, underperforming the 200-, 100- and 50-day simple moving average lines. The stock had a market capitalization of $107.62 billion and a 52-week range of $166.3 to $210.19 at close Tuesday.

Currently, Amgen pays a $1.45 cash quarterly dividend per common share, generating a forward dividend yield of 3.29% versus the industry median of 1.55% and compared to the S&P 500 index dividend yield of 1.8%. Yields are as of July 30.

Disclosure: I have no position in any security mentioned.

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This article first appeared on GuruFocus.